FX.co ★ Yen Steadies Amid Political Uncertainty

The Japanese yen stabilized at around 158 per dollar on Tuesday, following a period of heightened volatility due to political uncertainties affecting market sentiment. Prime Minister Sanae Takaichi announced plans to dissolve parliament on Friday and call for a snap general election on February 8, aiming to secure public backing for her spending initiatives and broader policies. This election will determine the fate of all 465 seats in the lower house, serving as Takaichi's first major electoral challenge since she assumed office. Meanwhile, investors are closely watching the upcoming Bank of Japan policy meeting, where interest rates are expected to remain unchanged after a hike in December. Attention is focused on any hawkish comments from Governor Kazuo Ueda, amid speculation of a potential rate increase in June. Additionally, traders are vigilant regarding potential interventions in the yen by Japanese authorities, due to concerns about the effects of a weak currency on domestic inflation.